Alberta Sales Tax (GST) Calculator 2024
Sales Taxes in Alberta
Alberta is the only province in Canada without a provincial sales tax. Goods and services are charged only the federal 5% Goods and Services Tax (GST). The Fraser Institute refers to this as the “Alberta Advantage”, part of a combination of low tax rates that historically made Alberta the lowest taxed provinces in Canada. While Alberta’s income tax was eventually increased in 2015, the province remains one of the lowest taxed provinces in Canada.
Sales Taxes Across Canada for $1,000
Alberta Rebates and Exemptions to the GST
There are two types of exemptions for GST: direct exemptions and zero-rated goods and services. The difference is related to how businesses handle costs related to the exemptions, but as a consumer, you would not have to pay GST on items from either category.
Goods and services that are zero-rated from GST include:
- Basic groceries, including meats, fish, cereals, dairy products, eggs, vegetables, coffee, tea. Some foods including snack foods, liquor, and carbonated beverages are charged HST.
- Prescription drugs, but not any drugs available over-the-counter (OTC).
- Medical devices
- Feminine hygiene products
Goods and services that are directly exempt from GST include:
- Residential resales of property that has been previously owned and used
- Rental accommodations of longer than a month
- Educational services that lead to a certificate or diploma or are required for a certain practice
- Medical and dental services
- Financial services such as bank fees
- Legal aid services
- Day-care services
Federal Revenues from Sales Taxes
While Alberta does not have a provincial sales tax, the federal 5% Goods and Services Tax (GST) still applies. According to Statistics Canada data, the GST generated about $54.4 billion (unadjusted) in revenue in 2023. This is 11.9% of total revenue generated at the federal level. This is almost double the amount Canada spends on national defence every year.
The Impact of Natural Resources
Alberta is known for its extensive natural resource industry primarily centred around fossil fuels. Alberta’s government owns 81% of oil and gas resources in Alberta and collects royalties from their extraction. In the 2022-23 fiscal year, the government of Alberta collected $25.2 billion, or 33% of all government revenue as the Non Renewable Resource Revenue. As a result, Alberta does not need to charge a provincial sales tax as a source of revenue.
Many other governments of resource-rich regions have similar initiatives. Alaska has the Alaska Permanent Fund that issues annual dividends to Alaska residents. Norway has the world’s largest sovereign wealth fund with assets in excess of $1 trillion USD. Because of their natural resources, Alberta and these other regions are able to provide economic incentives to their citizens without additional taxation.